An Evil and a Remedy: The Lottery in Pennsylvania

Jackpot!

For thousands of years the lottery has offered mankind the opportunity to accrue something for nothing-or at least a lot for a little. Usually in fact, it returns nothing. But the potential exists, and for many the dream of winning is irresistible.

As most know, a lottery is any contest based on chance, which offers a prize, and which requires participants to pay a fee or buy something. The lottery system is – and has been – a popular way for indi­viduals, charitable organiza­tions and governments to achieve financial stability.

It also is – and has been­ – controversial; its history in Pennsylvania is characterized by swings from acceptance and great popularity to con­demnation and attempts at abolition.

There is little doubt about the utility of lotteries. At its height in the early nineteenth century, the lottery system was used to pay for numerous schools, churches and public improvements, even though it was particularly subject to corruption and fraud. Mer­chants disliked lotteries be­cause they saw them as competitive. Moralists hated them, proclaiming them evil, as well as an unfair tax on the poor and gullible, leading solid working class people to ruin. Each side – promoter and detractor – has had its day, and the argument continues to this day.

In pre-Revolutionary Amer­ica the lottery was a natural, even necessary, institution, practiced throughout the colo­nies. Ln a tight economy, short of cash, where indebtedness was common and credit rare, the lottery afforded a means for individuals to dispose of property and for institutions to raise capital. An individual with land to sell had little hope of selling it to a potential pur­chaser for its full value. But through a lottery, with many individuals contributing to the pot, the seller could raise much more money, possibly enough to satisfy his debts, and the winners received land which they could never have otherwise afforded. Churches and educational institutions held lotteries to raise money for buildings. Their partici­pants might reason that by buying tickets they were per­forming a moral duty.

From the very beginning there were instances of fraud. It was quite easy for the un­scrupulous to set up a lottery, sell all the tickets – and disap­pear. Often, faulty goods were offered as prizes and drawings were rigged. Greed and na­ivete on the part of the partici­pants bred graft and corruption on the part of the managers.

While lotteries were gener­ally accepted in a free­wheeling colonial era society – even by the churches – there were those who considered them evil. The Quaker disapproval of gam­bling and most forms of amusement certainly included lotteries, and as long as Quak­ers controlled the Assembly, lotteries in Pennsylvania were limited, and much less com­mon than in the other colo­nies. Starting with the Great Law, passed by the first Gen­eral Assembly of Pennsylvania in 1682, and continuing in 1693, 1700 and 1705, the Quak­ers attempted to legislate against lotteries. All of these acts were nullified by the Crown.

One of the problems with this legislation was that it attempted to cover too much. The 1705 law, An Act Against Riotous Sports, Plays, and Games, ambitiously outlawed all games “now invented or hereafter to be invented.” The Queen considered it an “un­reasonable restraint on the King’s Subjects from taking innocent Diversions.”

In 1729, the Assembly fi­nally established a law accept­able to the Crown that effectively regulated lotteries, although not in the way in­tended. Technically, it prohib­ited all lottery drawings and instituted a fine of one hun­dred pounds for offenders, half of which was to go to the governor and half to the in­formant. In fact, it was used as a kind of license, with the governor waiving or remitting his half of the fine for causes which he considered worthy. The portion due the informer was also returned or paid as a cost of doing business. Some fifty-two lotteries were held under this system, raising funds for schools, bridges, roads and churches.

The Proprietors themselves, in 1735, undertook a scheme to dispose of one hundred thou­sand acres of land anywhere in Pennsylvania except where it was under existing ownership. (One attraction of this plan was that it gave squatters an opportunity to legally acquire the land they inhabited). The lottery was a failure and never drawn; ultimately the tickets were recognized as titles to land.

While the Quakers in their Yearly Meeting resolutions continued to rail against lot­teries, their political power continued decreasing. By 1750, they had lost control of the Assembly, after which the number of lotteries carried out in the colony grew significantly.

The most famous scheme of this period was for the Col­lege, Academy, and Charitable School of Philadelphia, which later became the University of Pennsylvania. From 1755 to 1761, nine different lotteries raised more than nine thou­sand dollars for the college. They also led to a great deal of controversy. From November 1758 to January of the follow­ing year, the Pennsylvania Jour­nal carried a spirited debate on the subject of lotteries in gen­eral, led by “Pennsylvanicus,” who claimed they were con­trary to religion and the inter­ests of society. His respondent claimed that lotteries were sanctioned by scripture and were a necessary support to worthy causes, to which “Pennsylvanicus” answered that examples of precedent were no excuse. “If so, theft, adultery and even murder itself may be justified.”

In 1758, David James Dove, a former professor of English at the Academy, published a pamphlet, The Lottery: A Dia­logue between Mr. Thomas Trueman and Mr. Humphrey Dupe, in which he character­ized the lotteries for the Acad­emy and other institutions as “manifestly no better than public frauds.” The Academy’s trustees forbade the faculty to respond to these attacks, label­ing the perpetrators “low crea­tures, who wrote from Passion and Resentment.”

By 1761, there were twenty­-seven lottery schemes in Penn­sylvania, more than in any other year to date. They in­cluded improvements in Phila­delphia, bridges over the Conestoga and Octorara creeks and school and church con­struction. However, opposition to them continued mounting. In response, the legislature, which had been trying, albeit in vain, to outlaw them, finally passed an act banning all lot­teries not authorized by the legislature or the British gov­ernment. The act also transfer­red control of lotteries from the governor to the legislature. Penalties were severe – fines of five hundred pounds for orga­nizing an illegal lottery, twenty pounds for advertising one­ – and were given to the overse­ers of the poor in the area in which the offense took place. The act was more effective than any other had been in controlling lottery activity. Any person or organization desir­ing to carry out a scheme had to petition the legislature for permission. If viewed favor­ably, the lottery was formally authorized by act. In 1762, the year the new legislation was passed, seven lotteries were conducted, twenty less than the previous year. Between 1762 and 1796, only twenty­-three lotteries were author­ized, all but six of them for public or charitable purposes.

While several lotteries fi­nanced street paving, one subsidized a public vineyard on Pettie’s Island in the Dela­ware River. Many eighteenth century lotteries supported churches, including Episcopal congregations in Reading, Chichester, Carlisle, York, Concord and Philadelphia, and German Reformed con­gregations in Heidelburg, Lebanon and Yorktown. A German Lutheran church and school in Lancaster County held a lottery, as did St. Peter’s Church in Philadelphia. Many congregations combined ef­forts so that nine lotteries held between 1762 and 1796 actually benefitted twenty-one churches. It is no mystery why the clergy did not as a rule condemn lotteries. They, like the government, reaped many rewards.

For a time the opposition to lotteries diminished. They were popular, particularly if they were regulated and there was some guarantee of honest management. Funds were constantly needed for public works and the building of churches and schools, for which the government was generally short of cash. At the same time, the populace was burdened by the oppressive sugar and stamp acts. Individ­uals found it somewhat more pleasant to buy a lottery ticket than to pay taxes or a church tithe.

The period from the ratifica­tion of the Constitution through 1833, when they were abolished, was the great age of lottery activity in Pennsylva­nia. A growing commonwealth with a growing population increasingly needed services, improved transportation sys­tems and educational facilities. Lottery managers became ever more ambitious, offering greater numbers of tickets over wider geographical areas for higher stakes.

In 1746, a popular lottery organized by Benjamin Frank­lin for Philadelphia defense had attempted to raise a mod­est three thousand pounds. In 1785, forty-two thousand dol­lars was sought for improve­ments to Schuylkill River navigation and to the public roads west of Philadelphia. A decade later, the Schuylkill and Susquehanna Navigation Company and the Delaware and Schuylkill Canal Naviga­tion Company (later combined and reorganized as the Union Canal Company) sought no less than four hundred thou­sand dollars!

Ultimately, lotteries became big business. Until 1780, tick­ets were sold informally by members of the organization for which the lottery was being held, but by the close of the eighteenth century, profes­sional contractors controlled and directed lotteries. Profes­sional brokers thrived by sell­ing not only tickets but “insurance,” which returned to the buyer the difference be­tween the amount he invested in tickets and the amount of his winnings. Brokers hired hawkers to stand on street corners and entice passersby. They became money changers, or bankers, in an era when currency was not completely uniform. In fact, several histo­rians believe that the lottery brokerage was a forerunner of the investment banking firm, amassing small amounts from small investors for conversion into large capital.

Brokers advertised heavily in newspapers, and with broadsides and songs and jingles. Under engaging names such as Allen’s Truly Lucky Office, Waite’s Truly Fortunate Lottery & Exchange Offices and Latshaw’s Lucky Office, they boasted of the winning tickets they had sold. Latshaw’s carried a regular advertisement in the Lancaster Intelligencer, proclaiming, in part:

If once Dame Fortune lets you draw,
You’ll find her faithful ever;
Her only agent is Latshaw
And he’ll forget you never.

Brokerages proliferated. Large companies, such as S. & M. Allen and Company, oper­ated branches throughout the state and the nation, despite laws prohibiting interstate ticket sales. Major towns and cities – Harrisburg, Lancaster, Greensburg, Washington, Reading – each had several brokerage houses. In 1809, there were three offices in Philadelphia, by 1827 there were sixty, and in 1833 there were well more than two hun­dred. In 1831, each office em­ployed an average of four people, two of whom served as street hawkers.

Ambitious promoters de­vised ingenious methods to attract more ticket buyers and more profit. Besides “insur­ance,” brokers sold fractions of chances for those – including children – who could not af­ford the price of a full ticket. They rented tickets, gave cus­tomers credit, encouraged installment buying and ac­cepted in-kind payment. Op­portunities for corruption were vast: drawn numbers known to be blanks were sold, as were more fractions of a ticket than were actually in the whole.

Of course, brokers offered tickets for more than just the lotteries authorized in Penn­sylvania. In 1832 Yates & McIn­tyre proffered more than 420 lottery classes for sale, at a cost of thirty thousand dollars per week, and prizes totaling over fifty-three million dollars. Of these classes, 394 were illegal in the Commonwealth. The legislature regularly attempted to eliminate abuses such as “insurance” and to prohibit the sale of “foreign,” out-of­-state lottery tickets, notably in acts passed in 1805, 1811 and in the 1820s. Enforcement was difficult, however, and the laws had little effect.

Between 1747 and 1833, 176 authorized lotteries were re­corded in Pennsylvania, offer­ing more than eight million tickets and some fifty million dollars worth of prizes, and benefiting 187 projects.

Inevitably, lotteries glutted the market, and many proved unsuccessful. Advertisements filled newspapers for as many as three years for a single scheme, tickets weren’t sold, drawings weren’t conducted, and those who held tickets had to petition the legislature to force the drawings. The odds in favor of the purchaser even in a successful, well-run lottery were not great. For the holder of one of ten eighths of a ticket (possibly already drawn) in a dubious scheme, they were nil.

The largest Pennsylvania lotteries supported public improvements, and the most ambitious ever launched oc­curred in 1795 when the Schuylkill and Susquehanna Navigation Company and the Schuylkill and Delaware Canal Navigation Company at­tempted to raise nearly a half million dollars. In 1811, sixteen years after the lottery was established, only sixty thou­sand dollars had been raised, and the joint venture was reorganized and renamed the Union Canal Company. For another twenty-five years the Union Canal lottery continued amidst great controversy, end­ing only with the abolition of lotteries in Pennsylvania. In the meantime, however, some fifty schemes were carried out, offering more than thirty-three million dollars in prizes! In 1832 alone, $5,216,240 was awarded. The company should have received fifteen percent of this amount, which would have brought well more than the four hundred thou­sand dollars required, but cheating was common, compe­tition was high (“foreign” lotteries were blamed}, and tickets were hard to sell. The company actually retrieved only between five and ten percent of the prize amount.

Long before the Union Canal scandal, lotteries had been opposed as immoral by a certain portion of the popula­tion. With the burgeoning of corruption and abuses, as well as the sheer numbers of lot­teries, opposition arose, which by the early 1830s became a public roar. Books, pamphlets, moral tales and even poems, such as the Wonderful Advan­tages of Adventuring in the Lot­tery and St. Denis Le Cadet’s The Lottery, A Poem, were widely distributed.

Newspapers published tirades. The Rural Repository of November 10, 1827, described the crowd at a drawing of the Union Canal Lottery: ” … there was the miserable besotted drunkard, dreaming upon oceans of gin twist and brandy, which he foolishly supposed would flow before him from the fraction of a ticket which he held in his drink-enfeebled hand. There too … was the poor, dejected, almost helpless widow …” The Christian Spectator railed against the tax that cost two hundred and twenty-five per­cent to collect, and pointed out that Pennsylvanians had paid more than three million dollars to raise one hundred and fifty thousand dollars for the canal. In 1831, the Independent Exposi­tor and National Philanthropist devoted five issues to chroni­cling the abuses of the canal lottery scandal.

The arguments against lotteries were evolving from Biblical quotation’s to charges of vice, fraud and the demoral­ization of society. The General Assembly of Pennsylvania received anti-lottery petitions from all parts of the Common­wealth. Two of the chief oppo­nents were the Working Men’s Party, which denounced lot­teries in its 1828 political cam­paign, and The Friend, a Quaker weekly publication.

The most effective anti­-lottery voice was that of Job R. Tyson, a highly respected Philadelphia lawyer and Quaker. In January 1833, he published a pamphlet entitled Brief Survey of the Great Extent and Evil Tendencies of the Lottery System as Existing in the United States. Closely argued, based not only on principle but on fact, it included thoroughly documented cases of fraud and corruption connected with lotteries, and a certified list of prisoners incarcerated because of lottery debts, some of whom owed as much as thirty thousand dollars to brokers. Tyson also noted that in 1832 sales of lottery tickets in the United States exceeded sixty­-two million dollars, amounting to more than five times the federal budget for that year. Tyson’s Brief Survey, the most important publication of the anti-lottery movement, was used widely throughout the nation. And the end of the lottery was in sight.

On March 1, 1833, Pennsyl­vania became the first state to abolish lotteries, effective December 31.

Although Pennsylvania lotteries were abolished, “for­eign” lotteries continued be­cause, although illegal, they were almost impossible to control. Pennsylvania re­mained a hotbed of anti-lottery activity and the Pennsylvania Society for the Suppression of Lotteries fervently tried to convert the nation. At the Pennsylvania Constitutional Convention in 1837 an unsuc­cessful attempt was made to include a prohibition of lot­teries in the state bill of rights. While the 1833 law forbade “foreign” and private lotteries, the legislature still had the right to authorize schemes and the anti-lottery champions were afraid it would do so. They had some justification. In the 1840s, efforts were made by various interests – notably lottery contractors and many concerned with liquidating the state debt – to reintroduce the lottery system.

In the 1860s the United States Congress fortified the state’s position by licensing ticket dealers and making it illegal to send any kind of lottery materials through the mail. Congress made lotteries illegal altogether in 1894.

Today, Pennsylvania again has a lottery, begun in 1971 to subsidize certain expenses of senior citizens. This time, however, it is entirely con­trolled by the Commonwealth, and although incidents of cheating have occurred, the assumption is that the system as a whole is reasonably fair.

Lotteries have always been controversial. In Pennsylvania for a century and a half they were tolerated and often en­couraged. They supported many good works but the cost was high, in human life as well as in dollars. Attempts to regulate lotteries have always been only partially successful. In 1989 the situation is not too much different. While the Pennsylvania Lottery flour­ishes, so do the numbers games, the Irish Sweepstakes, and the bingo halls. And the debate continues.

For Further Reading

Ezell, John Samuel. Fortune’s Merry Wheel: The Lottery in America. Cambridge, Mass.: 1960.

Martin, Asa E. “Lotteries in Pennsylvania Prior to 1833.” Pennsylvania Magazine of History and Biography. 47, 1 (1923), 307-327

Nordell, Philip G. “The Academy Lotteries: A Chapter in the Early History of the University of Penn­sylvania.” The Library Chroni­cle. 19, 2 (Winter 1952/53) 51-76.

Sen er, S. M. “Millersville and Other Early Towns Established by Lotteries.” Lancaster County Historical Society Journal, 4, 1 (1899).

Tyson, Job R. Brief Survey of the Great Extent and Evil Tenden­cies of the Lottery System as Existing in the United States. Philadelphia: N.P., 1833.

The author and editor wish to acknowledge the assistance of the Historical Society of Pennsylva­nia, Philadelphia, for the gener­ous use of illustrations accompanying this article.

Trina Vaux is a freelance re­searcher and writer in the Phila­delphia area. She has written on various aspects of history and architectural preservation in Pennsylvania and New Jersey. In addition to a number of articles and reports, she has contributed to several major publications, including The Cape May Hand­book, Guide to Women’s His­tory Resources in the Delaware Valley Area and Historic Rittenhouse.